Is a home an asset or liability? - Page 3

fasternyou929 · 12-14-2009, 04:56 PM

Quote:

Originally Posted by t-rock

The way I have always been taught (by parents and as a finance major) an asset is something that will gain money for you and a liability is something that will lose you money.

I think you may have misunderstood what they were saying. I paid cash for my bike, which loses value every year. It will NEVER make me money (no matter how fast I turn laps at track days), but it is an asset because it's worth more than I owe on it.

What you stated above makes sense in an "if I sold this item right now" scenario. If it would make you money to sell it right now, it could be viewed as an asset.

IMO, of course. The real definitions of asset vs. liability are actually much less grey than that.

t-homo · 12-14-2009, 04:57 PM

I will admit, I think completely differently than most people as far as business and finance goes.

fasternyou929 · 12-14-2009, 04:58 PM

Quote:

Originally Posted by t-rock

I will admit, I think completely differently than most people as far as business and finance goes.

It's good to think differently, I'll never discourage that.

But I wouldn't encourage using basic financial terms in new, ambiguous ways.

t-homo · 12-14-2009, 05:00 PM

Quote:

Originally Posted by pauldun170

I own a structure called a house.
In order to purchase this structure, I got SECURED loan.

The value of the home after the loan agreement is irrelevant.
It's mine. Its an asset.

Basic stuff

I consider it an investment at that point.

anthonyk · 12-14-2009, 05:00 PM

Quote:

Originally Posted by fasternyou929

I think you may have misunderstood what they were saying. I paid cash for my bike, which loses value every year. It will NEVER make me money (no matter how fast I turn laps at track days), but it is an asset because it's worth more than I owe on it.

Actually, it's an asset because someone would give you money for it if you sold it. Totally independent of what you might owe on it.

t-homo · 12-14-2009, 05:00 PM

Has anyone ever read Rich Dad, Poor Dad by Robert Kiyosaki? If so, my mindset is closer to his than normal.

pauldun170 · 12-14-2009, 05:01 PM

Quote:

Originally Posted by fasternyou929

It's good to think differently, I'll never discourage that.

But I wouldn't encourage using basic financial terms in new, ambiguous ways.

Homeslice · 12-14-2009, 05:02 PM

Quote:

Originally Posted by fasternyou929

it is an asset because it's worth more than I owe on it.

Even if it wasn't, it's still an asset.

Your bike is an asset, and your loan on it is a liability. They both exist simultaneously. Your bike isn't prevented from being an asset just because you have a liability (loan) on it.

pauldun170 · 12-14-2009, 05:05 PM

Quote:

Originally Posted by t-rock

Has anyone ever read Rich Dad, Poor Dad by Robert Kiyosaki? If so, my mindset is closer to his than normal.

Finance majors...

Kiyosaki is an asshat.

t-homo · 12-14-2009, 05:09 PM

Ok so I guess the question I was trying to get at is a little more complex.

When you buy a home, you take on the house as an asset and the mortgage and related fees as liabilities. I think we all agree on this. Which one out-weighs the other in long term and/or short term?

View Poll Results: Is a home an asset or liability?
Asset	17	56.67%
Liability	7	23.33%
I live in tater's whore of an ex-wife's chlamydia infested vag.	6	20.00%
Voters: 30. You may not vote on this poll

12-14-2009, 04:57 PM	#22
t-homo WSB Champion Join Date: Feb 2008 Location: Springfield, MO Posts: 7,146	I will admit, I think completely differently than most people as far as business and finance goes.

12-14-2009, 05:00 PM	#26
t-homo WSB Champion Join Date: Feb 2008 Location: Springfield, MO Posts: 7,146	Has anyone ever read Rich Dad, Poor Dad by Robert Kiyosaki? If so, my mindset is closer to his than normal.

12-14-2009, 05:09 PM	#30
t-homo WSB Champion Join Date: Feb 2008 Location: Springfield, MO Posts: 7,146	Ok so I guess the question I was trying to get at is a little more complex. When you buy a home, you take on the house as an asset and the mortgage and related fees as liabilities. I think we all agree on this. Which one out-weighs the other in long term and/or short term?